ECONOMIC and FINANCIAL AFFAIRS COUNCIL Tuesday 27 January in Brussels

Transcription

1 Cuncil f the Eurpean Unin PRESS EN BACKGROUND 1 Brussels, 23 January 2015 ECONOMIC and FINANCIAL AFFAIRS COUNCIL Tuesday 27 January in Brussels A meeting f the Eurgrup will be held n Mnday 26 January, starting at On Tuesday, ministers will attend a breakfast meeting, starting at 9.00, t discuss the ecnmic situatin in the EU, financial assistance t Ukraine and measures t stp the financing f terrrist rganisatins. The Cuncil meeting will start at The Cuncil will discuss the Cmmissin's prpsed actin plan n investment, specifically a prpsal t establish a Eurpean fund fr strategic investments. It is expected t adpt an amendment t the EU's parent-subsidiary directive, adding an anti-abuse clause t prevent the directive frm being used fr crprate tax avidance. The Cuncil will discuss wrk prgrammes f the Latvian presidency and the Cmmissin. Flexibility under the EU's Stability and Grwth Pact, review f ecnmic gvernance and preparatin f a February G20 finance meeting are als n the agenda. Press cnferences: after the Eurgrup meeting (Mnday evening); at the end f the Cuncil (Tuesday lunchtime). Press cnferences and public events by vide streaming: vide.cnsilium.eurpa.eu. Vide cverage in bradcast quality (MPEG4): tvnewsrm.cnsilium.eurpa.eu. Phtgraphic library fr phts in high reslutin: 1 This nte has been drawn up under the respnsibility f the press ffice. Press ffice - General Secretariat f the Cuncil Rue de la Li B-1048 BRUSSELS - Tel.: +32 (0) press.ffice@cnsilium.eurpa.eu - 1/6

2 Measures in supprt f investment - Eurpean fund fr strategic investments The Cmmissin will present a prpsal n the establishment f a Eurpean fund fr strategic investments (EFSI). The Cuncil will hld an exchange f views. The fund is ne f the cre elements f the Cmmissin's "investment plan fr Eurpe", published in Nvember It is expected t mbilise at least 315 billin in private and public investment acrss the EU. Cmmunicatin frm the Cmmissin n the investment plan The EFSI will be built n 16 billin in guarantees frm the EU budget and 5 billin in cash frm the Eurpean Investment Bank. In rder t ensure rderly executin f the budget despite ptential calls n the guarantee, the prpsed regulatin prvides fr the creatin f a guarantee fund that wuld gradually reach 8 billin (i.e. 50% f ttal EU guarantee bligatins) by Member states and ther third parties wuld be able t jin the EFSI agreement by means f capital cntributins. The Cmmissin has indicated that it wuld take a favurable attitude twards such cntributins when assessing member states' public finances. The prpsed regulatin wuld als set up a "Eurpean investment advisry hub" t help with the identificatin, preparatin and develpment f prjects acrss the EU. It wuld further establish a "Eurpean investment prject pipeline" t imprve investrs' knwledge f existing and future prjects. In December 2014, a task frce, c-chaired by the EIB and the Cmmissin, already identified abut 2000 prjects wrth 1,3 trillin. The EFSI's rle wuld be t ensure enhanced risk-bearing capacity and t supprt investments, mainly frm private surces, in energy, bradband and transprt infrastructure, and t back risk finance fr SMEs. By taking n part f the risk f new prjects thrugh a first-lss liability, the fund is estimated t reach an verall multiplier effect f 1:15 in real investment. The EFSI wuld be gverned by a steering bard that wuld set the strategic rientatin f the fund, asset allcatin and perating plicies and prcedures, including the investment plicy f prjects that the EFSI can supprt and the EFSI's risk prfile. Mrever, an investment cmmittee accuntable t the steering bard wuld assess specific prjects and select thse receiving EFSI supprt, withut gegraphic r sectrial qutas. The cmmittee wuld cnsist f a managing directr and six independent market experts. The Cuncil is due t agree its psitin n the draft regulatin in March 2015 and t cnclude negtiatins with the Eurpean Parliament in May This wuld allw the regulatin t be adpted in June The Eurpean Cuncil in December 2014 called fr the prpsal t be agreed in June t allw fr new investments as early as mid The Cuncil has set up an ad-dc wrking grup f experts t wrk n the draft regulatin. The grup has met twice s far. The Cmmissin's "investment plan fr Eurpe" is based n three mutually reinfrcing strands: - The mbilisatin f at least 315 billin in new investments between 2015 and 2017, maximising the impact f public resurces and unlcking private investment. This will be dne by establishing the EFSI in the EIB Grup - Targeted initiatives t ensure this extra investment meets the needs f the real ecnmy - Measures t prvide greater regulatry predictability and t remve barriers t investment. The prpsed regulatin creates a legal framewrk and prvides budgetary allcatins fr the first tw strands. The Eurpean Cuncil called fr the establishment f an EFSI in December It supprted the intentin f the Cmmissin and the EIB t strengthen technical assistance t prjects at the Eurpean level by creating an investment advisry hub t be peratinal as f mid /6

3 Presidency wrk prgramme The Latvian presidency will present a wrk prgramme n ecnmic and financial affairs fr the duratin f its term, which runs frm January t June The Cuncil will hld an exchange f views. Presidency wrk prgramme fr ecnmic and financial affairs The presidency intends t cntinue wrk aimed at enabling a sustainable ecnmic recvery in Eurpe. This will invlve fiscal respnsibility, in line with the EU's Stability and Grwth Pact, and initiatives t develp grwth. In particular, the presidency will wrk t implement the Cmmissin's "investment plan fr Eurpe" by June 2015, as decided by the Eurpean Cuncil in December 2014 (see separate item abve). Under the Latvian presidency, the Cuncil will cntinue a review f ecnmic gvernance refrms made in 2011 and 2013 (see separate item belw). It will cmplete a review f the EU's 2020 strategy fr grwth and jbs. The presidency will ensure a smth handling f the "Eurpean Semester" plicy mnitring prcess, integrating imprvements initiated by the Cmmissin. In March, it will rganise a debate n implementatin f key structural refrms. Further t decisins taken by the Eurpean Cuncil in Octber 2014, the presidency will cntinue wrk twards a strnger, better-functining and mre resilient ecnmic and mnetary unin. The presidency will als cntinue wrk n financial sectr regulatins and n measures t prevent tax fraud and tax evasin. Tgether with the Cmmissin and the Eurpean Central Bank, it will represent the EU at meetings f G20 finance ministers and central bank gvernrs. The presidency will mrever priritise wrk n macr-financial assistance t Ukraine. Cmmissin wrk prgramme The Cmmissin will present its wrk prgramme fr 2015, fcusing n actins planned in the area f ecnmic and financial affairs. Cmmissin wrk prgramme In this area, the Cmmissin emphasises its intended effrts t bst jbs, grwth and investment. As part f its "investment plan fr Eurpe", investments will be mbilised thrugh a new Eurpean fund fr strategic investments (see separate item abve). Additinally, the Cmmissin will duble the use f innvative financial instruments t increase the impact f the EU's structural and investment funds fr the perid. It will als present prpsals t imprve the business envirnment by remving regulatry and nn-regulatry barriers t investment and further strengthen the EU's single market. As cncerns financial services, the Cmmissin will seek t cmplete and implement the current verhaul f the regulatry framewrk, including new rules n bank supervisin and bank reslutin. It will examine hw the single market fr retail financial services can deliver mre benefits t cnsumers. The Cmmissin annunces an actin plan t build a capital markets unin. In the shrt term, it will prpse a framewrk fr high-quality securitisatin and cnsider hw t extend successful private placement schemes. It will als review the prspectus directive with a view t reducing administrative burdens n SMEs. Regarding ecnmic and mnetary unin, the Cmmissin is develping prpsals that will invlve further steps twards pled svereignty in matters f ecnmic gvernance. There will als be actins t reinvigrate scial dialgue at all levels. The Cmmissin will step up effrts t cmbat tax evasin and tax fraud and prmte tax fairness and tax transparency. It will set ut an actin plan, and rapidly present a prpsal n the autmatic exchange f infrmatin n crss-brder tax rulings. Wrk als cntinues in relatin t VAT. 3/6

4 Ecnmic gvernance review - Flexibility under the Stability and Grwth Pact The Cuncil will discuss tw cmmunicatins frm the Cmmissin dealing with the EU's fiscal rules and prcesses. Ecnmic gvernance review The first prvides a review f refrms made in 2011 and 2013 t EU ecnmic gvernance rules. Cmmissin cmmunicatin n the review The 2011 and 2013 refrms strengthened fiscal rules and prcesses under the Stability and Grwth Pact and intrduced a macrecnmic imbalances prcedure. The aim was t: achieve clser crdinatin f fiscal and ecnmic plicies; enable a sustained cnvergence f the ecnmic perfrmances f the member states; ensure transparency, credibility and demcratic accuntability. In its cmmunicatin, the Cmmissin assesses t what extent the new rules (nicknamed the sixpack and the tw-pack) have been effective in achieving their bjectives. It cnfirms that the rules have significantly strengthened the EU's ecnmic gvernance framewrk. It als reveals scpe fr imprved transparency and simplified plicymaking, and fr a better impact n grwth, imbalances and cnvergence. Hwever, given the limited experience gained under the new rules, the Cmmissin des nt suggest cncrete measures. It instead calls n the Cuncil and the Eurpean Parliament t discuss the issues. Press release n the 2011 refrm Press release n the 2013 refrm Flexibility under the Stability and Grwth Pact In the secnd cmmunicatin, the Cmmissin sets ut hw intends t make the best use f flexibility within the existing rules f Stability and Grwth Pact. Cmmissin cmmunicatin n flexibility The Stability and Grwth Pact is aimed at ensuring that fiscal discipline is maintained in the member states. It sets reference values f 3% f GDP fr annual budget deficits and 60% f GDP fr public debt. The flexibility envisaged by the Cmmissin in its cmmunicatin cvers three main elements: Structural refrms. Member states will be granted cnditinal flexibility under the preventive arm f the pact in relatin t structural refrms. They will be allwed temprary deviatins f up t 0.5% f GDP frm the fiscal adjustment paths leading t their medium-term budgetary bjectives. This n cnditin that the refrms are majr, that they are implemented, and that they have verifiable lng-term budgetary benefits. Similarly, when pening an excessive deficit prcedure (crrective arm f the pact), the Cmmissin may recmmend a later deadline fr crrectin f the deficit. When the member state is already subject t an excessive deficit prcedure, it may recmmend an extensin f the deadline. 4/6

5 Public investments. The cmmunicatin clarifies flexibility that was already granted in the past under the preventive arm f the pact. Member states are allwed temprary deviatins frm their fiscal adjustment paths. This n cnditin that: (a) GDP grwth is negative r the utput gap greater than 1.5% f GDP; (b) the deviatin des nt lead t the 3% f GDP limit being breached and a safety margin is preserved; (c) investment levels are increased as a result; (c) eligible investments are c-funded by EU prgrammes; (d) the deviatin is cmpensated within the timeframe f the member state's fiscal prgramme (stability r cnvergence prgrammes). Additinally, member state cntributins t the Eurpean fund fr strategic investments (see separate item abve) will nt be cunted when defining a fiscal adjustment under either the preventive r the crrective arm f the pact. Nr will funds prvided t c-finance EFSI prjects. Cyclical cnditins. Under the preventive arm f the pact, the Cmmissin will be mre respnsive t the ecnmic cycle f a member state. It will use a mre cmplex methd t specify its fiscal adjustment path, depending n whether it is in gd r in difficult ecnmic times. Under the excessive deficit prcedure (crrective arm f the pact), in line with past practice, the Cmmissin will distinguish as much as pssible thse budgetary develpments attributable t gvernment cntrl frm thse linked t an unexpected decline in ecnmic activity. The cmmunicatin sets ut merely the Cmmissin's interpretatin f flexibility under the Stability and Grwth Pact. It suggests n changes t the rules themselves, and therefre makes n legislative prpsals. Preparatin f G20 ministerial meeting in Istanbul The Cuncil is expected t endrse EU terms f reference fr a meeting f G20 finance ministers and central bank gvernrs in Istanbul n 9 and 10 February The terms f reference, prepared by the Ecnmic and Financial Cmmittee, cnstitute a cmmn psitin fr EU representatives and thse member states that participate in the G20. The Istanbul meeting is expected t cver six main tpics: the glbal ecnmy, the framewrk fr grwth, investment and infrastructure, internatinal financial architecture, financial regulatin and taxatin issues. Turkey chairs the G20 frm December 2014 t Nvember The 2015 G20 summit will take place in Antalya n 15 and 16 Nvember. Preventing crprate tax avidance - Anti-abuse clause The Cuncil is expected t adpt, withut discussin, an amendment t a directive t prevent it being used by crprate grups fr tax avidance and aggressive tax planning. T this end, it will intrduce a binding anti-abuse clause in the EU's parent-subsidiary directive. Agreement n the amending directive was reached at the Cuncil's meeting n 9 December Text f the draft amending directive The aim is t prevent misuses f the parent-subsidiary directive and t achieve greater cnsistency in its applicatin in different member states. The anti-abuse clause will apply as a "de minimis" rule, meaning that member states can apply stricter natinal rules, as lng as they meet minimum EU requirements. The clause will prevent gvernments frm granting the benefits f the directive t arrangements that are nt "genuine", i.e. that have been put int place t btain a tax advantage withut reflecting ecnmic reality. The issue f crprate tax avidance is a high plitical pririty internatinally. The OECD's wrk n base ersin and prfit shifting has been endrsed as the way frward at recent G20 and G8 meetings. 5/6

6 The parent-subsidiary directive (2011/96/EU), adpted in Nvember 2011, is intended t ensure that prfits made by ne crss-brder grups are nt taxed twice. It requires member states t exempt frm taxatin prfits received by parent cmpanies frm their subsidiaries in ther member states. In Nvember 2013, the Cmmissin prpsed t amend the directive with the twfld bjective f tackling hybrid lan mismatches and intrducing a general anti-abuse rule. In May 2014, the Cuncil decided t split the prpsal and t address the tw issues separately. In July 2014, it adpted as a first step prvisins t prevent crprate grups frm using hybrid lan arrangements t benefit frm duble-nn taxatin under the directive. Press release n prvisins t prevent duble nn-taxatin derived frm hybrid lan arrangements Member states will have until 31 December 2015 t intrduce an anti-abuse rule int natinal law. The same deadline applies fr transpsitin f the amendments t tackle hybrid lan mismatches. The amending directive requires unanimity fr adptin by the Cuncil, after cnsulting the Eurpean Parliament. (Legal basis: article 115 f the Treaty n the Functining f the EU.) Other issues Under "ther business", the Cuncil will take stck f:nging wrk n financial services dssiers. 6/6